NFTs are stored on the blockchain. The end. Kidding. That sentence alone has a lot of complex definitions and technologies behind it. Understanding those phrases is just one part of knowing what they mean.
With an industry full of unique vocabulary, understanding NFT storage goes far beyond defining a handful of words.
What Is an NFT?
The wild and wonderful world of NFTs can be a fun place to become involved in if you understand the ins and outs of the business. There is plenty to learn, and with new updates, collections, and trends happening every day, it can be tough to stay on top of it all.
With FLOLiO’s informative articles, we can assist you in understanding the complex marketplace, the best platforms to work with, and tips on how you can get the most from your NFTs.
When doing so, it is best to start with the basics so that you can understand some crucial information, such as where NFTs are stored.
The Basics of NFTs
The NFT marketplace can be a scary and confusing one. But, it can also be exciting and wonderful. One key to making the experience enjoyable (and even profitable) for you is having a solid grasp on the NFT space, and how it works.
Before you dive into marketing your NFTs, it is crucial to know just what it is you have in your possession, how they are created, and how they work. Understanding these facts can help you have a more solid marketing strategy.
Think of buying a car. Would you prefer to buy from the guy that can’t tell a steering wheel from a muffler? Or would you be more comfortable with a dealer who knows the ins and outs of the entire industry?
Having well-informed NFT collectors can boost the confidence of your buyer. No matter the best NFT advertising techniques you choose for you, being “in the know” will only add to your advantage.
What Is an NFT?
Chances are, if you are already at the stage of marketing your NFTs, you have some idea of what it is you are dealing with in today’s marketplace. In case you aren’t clear, the NFT stands for a non-fungible token.
Being that it is nonfungible means that NFTs are irreplaceable. There is no equal. An NFT is a unique piece. There are no two NFTs that are the same.
Likewise, only one true owner can own a single NFT at a time. These ownerships are verifiable and proven through the technology behind the NFT.
These digital files stand in for other items. As a token, they can represent nearly anything. Some sites focus on tangible, “real” world objects like vehicles or parcels of real estate. However, in most cases, you will find that the NFT communities today tend to focus on digital art forms.
NFTS as Digital art
Most often in the NFT marketplaces, you will find that NFTs stand in for digital art. They are the token that represents ownership in a wide variety of online assets. Some platforms even gear such tokens to stand in for things like pieces of real estate or even vehicles.
But when you are skimming the industry, you will find these digital files are most often forms of art in one way or another. To further understand these art forms, it is ideal to understand how they are created, stored, and function.
The technology that fuels the NFT industry, and ultimately is the storage location for an NFT, is called the blockchain. The blockchain itself is often described as a distributed ledger. It is an ongoing record of the transactions of its item. In the case of an NFT, a blockchain would contain each and every transaction from the minting (or creation) of the NFT to its current owner and location.
This same technology is used in cryptocurrencies, such as Bitcoin. You can trace each coin’s owner from start to finish. The blockchain, which is a collection of data banks (blocks), chronologically strung together (chain), is immutable.
This tech is decentralized, meaning no central authority is charged with its oversight. Any “rules” of the blockchain are determined and agreed upon by its users. A peer-to-peer network of devices serves as the blockchain’s storage unit. Instead of massive, centralized servers, this data is distributed across the blockchain’s network and its users.
This creates, additionally, a transparent and self-governing model. The NFT business would not be possible at all without the blockchain.
The Typical ‘Life Span’ of an NFT
An NFT, especially when in the form of digital art, comes in many shapes and sizes. Technically speaking, these files can be anything from a .jpg or .gif file to a full-length movie in .mp4 format or a brand new single from your favorite band as a .mp3.
No matter what the digital file type, this file can be uploaded to your chosen platform. This process, of creating an NFT, is called “minting.” NFT creators begin by selecting their chosen workspace. This will often determine the process required to mint, buy, sell, trade, or exchange NFTs.
From the costs of doing business to the style in which it can be done, these different spaces offer unique experiences. Depending on your unique goals, it is important to pick the space that makes the most sense for your NFT sales.
The NFT world relies on these marketplaces and exchanges for business. Many people collect NFTs for many reasons, and where they opt to do that business can fluctuate nearly as rapidly as the value of an NFT collection.
In order to make a transaction, the participants interact on an NFT platform. They agree upon a medium for the trade, such as which type of financing will be accepted. Most often, NFTs are purchased using cryptocurrency.
Your created NFTs (or those you have purchased from another NFT creator) will exist in your NFT wallet. The act of making a trade, sale, or exchange with another user will involve you connecting your wallet to your chosen NFT platform. You will take your saleable NFT and, once terms are agreed upon, make a transfer of ownership to the buyer’s wallet.
This act will cause an update in the blockchain. It will show that this particular NFT has moved from your ownership to that of the buyer. It sounds like a simple business, but the art of getting to this step, known as NFT marketing, can be a tad bit more difficult.
Let’s take a closer look at the NFT market itself to better understand how you can get a foot in the door and go from making digital assets to selling them!
Digital Asset Trading
You can think of a blockchain platform, offering a marketplace, much like that of a stock exchange. In New York, you can visit a physical space where the buying, selling, and trading of stock options are going on all around you.
However, being online isn’t the only difference the NFT sales space has over the stock exchange. These digital marketplaces also only operate online. While you can work in exchanges for stocks online, too, there is no physical trading space for NFTs. These are only digital.
Additionally, there is no open and close of the market each day. Digital assets can be on the move, 24/7, operating worldwide. While this is an exciting opportunity to buy, sell, and trade at any time of day, it also means changes are happening all the time.
The NFT Space
A constantly fluctuating marketplace is just one facet that is hard for newcomers to sometimes understand. The NFT space is a unique and varied one. Understanding its volatility is also crucial to functioning in the industry.
The NFT Market
If you are hoping to sell NFT art, it is important you understand the basic building blocks of the NFT market itself. NFT and blockchain technology can be confusing, but once you have a solid grasp of the basics, you can make more informed and beneficial decisions for yourself.
As the NFT community will quickly teach you, the value of NFTs is constantly changing. So too is this entire NFT system, which is still in its infancy stages of development. From new NFT platforms to freshly created crypto forms, there is always something changing.
When you being to formulate your marketing strategies, you will quickly come to understand that knowledge of this space is crucial. From concepts like NFT trading volume to basics in economics, it is important to know all about the business you are about to enter.
It is nearly impossible to land on the best NFT advertising concepts if you aren’t sure where to do it, what you’re doing, or even what the space entails. Be sure to do your due diligence and be well informed before you start on a new NFT art marketplace.
No matter what your NFTs are or where you choose to do the business, one thing that is important to note from the get-go is that this is a highly volatile marketplace. The world of NFTs is one of the very high ups and very low lows.
An NFT collection trading for millions today could be worth pennies tomorrow. Sometimes with little rhyme or reason, there will be a swift change. There may be drastic changes in your digital asset and its present value, sometimes without warning.
The NFT business is one of constant change. Be prepared for this fluctuation. A digital artist can have massive talent and still have poorly marketed NFTs. Your NFT collection that took years to create might go for pennies, as you watch an upcoming NFT collection go for millions, even though it was made with an autogenerating app.
The difference in these NFT projects is largely in how they are marketed. Your unique marketing strategies will determine the success or failure of your NFT promotion and will constitute nearly all of your project’s future.
No matter how careful you are, no matter how well you plan your NFT project, no matter how much NFT promotion you do, there is additionally a chance that your digital artwork won’t take off. It is important to be realistic about your endeavor, no matter how you go about it.
NFT fans will tell you that this space is full of unexpected and inexplicable changes. Before using any NFT marketing channel, be sure you are not getting in over your head. Never invest more than you can comfortably lose.
Stages of NFT Storage
Now that you understand some of the basics of what an NFT is, how they work, and where they exist, it is easier to explain the various stages of storage. As previously noted, all NFT projects exist in a digital form. They are ultimately stored online via digital forms.
No matter “where” they exist physically, they are ultimately on the blockchain. Unlike physical art that you can own and “take home,” your ownership of the NFT is stored, recorded, verified, and authenticated via the blockchain.
While there are many ways that NFT artworks can be valued, from the beauty of their display to the usefulness of their features, that data is ultimately encrypted coding. It is a series of binary zeroes and ones.
NFT transactions can alter the location of ownership, but the digital collectibles are just that: digital, and can only exist thanks to things like electricity, computer technologies, and the world wide web.
While you may own NFTs, they “live” online. They are yours. However, because of how NFTs work, the actual media is really just a digital file.
Copies are not an original
The trouble with digital files, as many a computer user will tell you, is that they are rather easy to copy, steal, and use without authorization. Thankfully, due to the blockchain and its ability, non-fungible tokens are stored from the time one makes NFTs to their current location via the blockchain.
If you own a collection of baseball cards, no one grabs one and claims it is theirs. However, when working with NFT projects, such ownership is a little more difficult to establish. Trading cards may look similar, but the ownership is proved through a blockchain, not a physical location.
You may decide to store your NFT collection in physical, hardware wallets, but ultimately what you are “holding” is the smart contract address. Digital assets are still your assets, but less about physical possession in your hands, and more about valid and authentic proof of ownership.
When you purchase an NFT artwork, you can consider the ownership of that work more like owning a pink slip or title to a car. The car may be at your parent’s house, but you own it, no matter where it goes. You can prove it by showing the title.
Hardware wallets aside, how you hold your NFT is up to you, but it is, in an actual sense, holding proof of ownership more than the actual item.
A Smart Contract
In more technical terms, the NFT has stored on a blockchain thanks to the development of a smart contract. If you aren’t familiar, we can break down that term, as well.
A smart contract is a rule or set of rules which operate on the blockchain. It is a rule set by an “If/Then” statement. If X occurs, then Y is possible.
You can look at the smart contract rather like a vending machine. If you put in a quarter, the pack of gum can be released. Without the introduction of money, there can be no product released.
Similarly, smart contracts allow for automated and streamlined processes on the blockchain. If X input is established, then Y outcome can happen.
How NFTs are Stored
By now you might understand that the precise way in which an NFT is stored can be even more technical to define. The smart contracts are just part of the equation that allows for collectors buying NFTs to prove ownership. It even can allow for the use of secondary sales after the initial purchase.
The smart contract address “point to” the location of the NFT on the blockchain. That location is received after an NFT is purchased. You may hear that those that buy NFTs keep them in a wallet (which we will soon explain). What is technically kept in that digital wallet is an encrypted location.
After buying art, you do become the owner. In terms of non-fungible tokens, however, what you hold onto is a smart contract address. It is the address that is kept in a digital wallet.
A Completely unique NFT Owner
There can, as previously mentioned, only be one owner at a time for a single NFT. That ownership is what verifies a true purchase, authenticating one’s “proof” of owning NFTs.
The contents of the NFT’s smart contract are stored on the web through a file sharing system. These files are part of the blockchain. Described often as a “digital ledger,” it is this recorded series of chronological transactions that denotes NFT owners from the minute they are minted to their present digital wallet location.
If you create NFTs, you are the owner from their inception. It is your art project. Most NFTs start this way. Whether a non-fungible token or any other token format, they can change to a new owner immediately after being minted.
Unlike a physical asset, it isn’t about getting the item to them. Everyone knows digital files can be easily transferred. The real science behind the decentralized space is in proving ownership.
Crypto enthusiasts will be the first to tell you, that you don’t need to have the art in your hands to show it is yours. Any users of an NFT simply rely on the decentralized, peer-to-peer network offered by a blockchain.
With a simple click into your browser, you can access your proof of ownership from nearly any location. Thanks to the access of the world wide web, you can show your authenticated ownership simply by logging into your wallet, of the hardware wallets variety, or any other.
The NFT Carbon Footprint
Even if you are new to the NFTs space, it is likely you’ve heard of one of the drawbacks to blockchain technology. Unfortunately, most NFTs operate thanks to a major drain on the environment.
Because they require such complex computations to encrypt and keep NFTs stored safely, there is a major drain on natural resources. Computers don’t run for free, and while gas fees are often collected by miners (in other words, funds paid to cover such expenses for those that are recording your NFT or crypto purchase in the blockchain), there is a cost to be paid that doesn’t show in dollars and cents.
Instead, many that oppose the NFTs and how they work do so because of this drawback. Many platforms are attempting to find ways around such costly storage solutions, and hope that alternative energies, different ways to prove your work, or unique mining options will help to alleviate these issues soon.
However, no matter the wallet you choose, the platform you exchange on, or the crypto you use to do business, chances are you are paying some sort of debt that you may never get back: a cost to the environment.
Engineers are working to find a new way to store NFTs and complete such decentralized transactions without such a dent in Mother Nature. New methods and advancements are created each and every day, which is rather a beautiful part of the online world. Stay informed on such changes and be aware of the costs that are not just financial when jumping into NFTs.
One Tool for NFT Storage and Knowledge
Every toolbox should have one. It is a multipurpose tool. It does a little bit of everything. It is the Swiss Army knife of tools, with many solutions in one place.
For those seeking to better understand the wild and varied world of NFTs, there is one place you really can’t (and shouldn’t) live without. FLOLiO creates a “one-stop shop” for all things NFT.
From marketing your own collections to find the right platforms for you, there is a plethora of information, helpful resources, and well-researched tips of the trade all under one virtual “roof.”
Visit our “Creators’ Hub” to find a dashboard made just for you. We know that the NFT industry can be a very unique and personal experience. No two collectors are the same. From varying goals to unmatched collections, each person with an NFT has an individualized adventure in the NFT space.
If it wasn’t clear from the many updates, frequent changes, and constant fluctuation of the NFT marketplace, the key to understanding NFTs is to stay on top of the ever-changing landscape. Being informed is crucial, and an NFT marketer can miss out on wonderful opportunities if they aren’t paying close attention.
Thankfully, you don’t have to spend countless hours to do so. With FLOLiO, your needs all come together on one site. Don’t waste hours researching the world wide web on your own. Take advantage of our information gathering and resources, free for use at your fingertips anytime.
A Trusted Resource
How to store your NFT is just one question that is bound to confuse you. Understanding NFTs doesn’t come easy. No matter how experienced you may be in the industry, there is always something new, a changed algorithm, a different trend. Staying on top of those updates is what matters, especially when it comes to NFTs.
With all of the information out there, however, the web can also be a dangerous space, too, if you don’t know what you are doing. We all know too well how there are misinformed, poor intention, and disruptive sources out there.
Thankfully, FLOLiO already has vetted its information and keeps it all up to date, no matter how frequently the market changes. With well-researched and updated topics, there are always new facts to learn about NFTs and FLOLiO has that for you.
Don’t waste your valuable time digging through misinformation. You only need one site when it comes to a trusted resource, and you’re on it! Trust FLOLiO to bring you the very best!